Starboard Value is an American hedge fund that was founded by Jeffrey Smith and Mark Mitchell in 2002. The company which has its headquarters in New York currently concentrates on investing in publicly traded U.S. companies.
Starboard invests in companies that are deeply undervalued in the market and through their constant engagements with the management teams and the board of directors, the company identifies and executes opportunities to increase the value of the company that can benefit the stakeholders of the company.
Starboard Value – A Brief History
Starboard Value was established by Jeffrey Smith and Mark Mitchell in 2002. During the initial days of the company in 2002, Starboard Value was a part of Ramius Capital. Ramius Capital is a $12 billion hedge fund and was founded by Peter Cohen and Jefferey Solomon in 1994.
Starboard Value operated as an active strategy inside Ramius Capital for years. Later, the company merged with the Cowen Group in 2008. Starboard Value functioned as Cowen’s hedge fund until 2011.
It became an independent firm in 2011 and as the company became independent, Mark Smith took charge as the firm’s chief executive officer and chief investment officer.
Even though the company was founded by Smith and Mitchell, when the company became an independent unit, they were joined by Peter Feld, who used to work as Managing Director and Head of Research at Ramius LLC.
Starboard Value – Management Team
The company has a director board of five members. Jeffrey Smith still occupies a pivotal role in the company. He tales on the positions of Managing Member, Chief Executive Officer, and Chief Investment Officer of Starboard Value LLP.
Before founding Starboard Value, Smith used to work as the Partner Managing Director at vRamius LLC, which is a subsidiary of Cowen Group.
Peter Fled who joined the company after it became a separate inquiry in 2011 is currently the Managing Member, Portfolio Manager, and the Head of Research at Starboard LLP. He was also a part of Reimus LLC.
The remaining executives of the company include Gavin Molinelli, who is currently a partner and also the Portfolio manager of the company, Kenneth Marlin who serves as the chief financial officer and also a partner of Starboard Value and finally, Lindsey Cara, who is the Counsel and chief compliance officer of the firm.
Starboard Value – Investments
Even though it has only been twenty years since the company was established, Starboard Value has investments in some of the major firms and also holds considerable shares in these companies.
Starboard Value accumulated over 15% stake in Office Depot, which is an American office supply holding company. After accumulating the shares in the company, Starboard received three seats on the board of Office Depot.
The company also urged Office Depot to complete its merger with OfficeMax and later also called for a merger between OfficeMax and Staples.
Starboard Value accumulated over a 10.7% stake in Mellanox Technologies, which is an Israeli semiconductor firm, in 2017. After the merger, Starboard understood that the firm was spending too much on its research and other expenses and urged the company to improve its margins.
In the following year, Starboard Value bought around a 9.9% stake in Cars.com. The company considered Cars.com as highly undervalued in the market and potentially salable.
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Also in 2018, Starboard Value accumulated about a 5.8% stake in Symantec which is a multinational software company based in Arizona.
Starboard Value also nominated five directors to the board of Symantec. Later, in September 2018, Symantec announced that three of the nominees by Starboard will be joining the Symantec board.
Apart from the above investments in different companies, Starboard Value has also taken the activist position in different companies like Calgon Carbon, Tessera Technologies, Yahoo, Papa John’s Pizza, Macy’s, Home Security, Brink’s, and Darden Restaurant.
Starboard Value – Retirement Of Mark Mitchell
Mark Mitchell, who was one of the co-founders of Starboard Value, retired from the firm in January 2019. Mitchell played an important role in making Starboard Values one of Wall Street’s most high-profile activist funds. Mitchell retired from Starboard Value-effective on January 15.
The company founded by Mitchell along with Smith is known for its success in winning seats on boards of popular companies.
Before retiring from the company, Mitchell worked in the roles of managing member, portfolio manager, and also the head of risk management and trading.
Starboard Value – Profitability
Considering the history and success of its operations throughout these years, Starboard Value is one of the most successful activist investors. Almost all of the firm’s activist campaigns are successful and they have replaced more than 80 directors on more than 30 boards of different companies.
The company currently holds almost $4.7 billion in terms of total assets under management. These assets are spread over 26 accounts, all of which are discretionary.
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